Understanding Federal Unemployment Insurance Benefits

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Through a series of laws, the federal government has offered an additional safety net for workers who have been laid off.  Extended unemployment benefit programs are in addition to individual state programs.  In Idaho, someone who is laid off from their job — through no fault of their own — can qualify for up to 26 weeks of state unemployment insurance benefits.  But because of the steep national unemployment rate, and the lack of jobs available, the federal government offers benefit extensions up to 73 weeks for jobless Idahoans.  The maximum state and federal benefit in Idaho is 99 weeks.

There are two types of federal extensions available to laid-off Idahoans: emergency unemployment compensation and federal-state extended benefits.  Idaho Department of Labor spokesman Bob Fick says those federal payments are based on the initial state benefit:

“The first type is emergency unemployment compensation, it is divided into four parts and you move through each part, increasingly trying to find a job as you move along.  The first tier is 80 percent of your state basic benefit, the second tier is 54 percent the third tier is 50 percent and the final tier is 24 percent.  If you move through all those tiers every week, making at least two job contacts and still unable to find work, you move into a program called federal-state extended benefits.” – Fick

If someone qualifies for the maximum Idaho benefit, which is 26 weeks, here is what the total maximum unemployment insurance benefits would look like:

[spreadsheet key=”0AiLU6Cs5LWZIdDJWV0xEQmc2RVJscWd1Y3VqYi1OQUE” source=”Idaho Department of Labor” sheet=0 filter=0 paginate=0 sortable=0]

Who pays for federal unemployment benefits?

Like the state system, the federal unemployment benefit system is also paid for through a tax on employers.  The federal unemployment tax is currently six percent on the first $7,000 of an employee’s wage.  But, in Idaho, employers pay just eight-tenths of a percent on the first $7,000.  That’s $56 per worker.  “Employers who belong to a state system that meets federal requirements, as Idaho’s does, they get a credit for 5.2 percent of the tax,” says Labor spokesman Bob Fick.

That tax revenue then gets funneled into three different federal trusts.  One provides grants that operate state labor departments, the second provides loans to states whose own trust funds go broke (like Idaho’s did), and the third finances extended unemployment benefits.  “Those trust funds in 2008 had multiple billions of dollars,” says Fick.  “Clearly, the recession went on longer than those trust funds could bear, and for the last two years the federal treasury has financed extended benefits.”

Idaho’s Department of Labor reports unemployed workers in the state have collected $750 million in federal extended benefits since 2008.